The following income statements were drawn from the annual reports of the Rocky Company and the Sandy Company:

Required
a. One of the companies is a high-end retailer that operates in exclusive shopping malls. The other operates discount stores that are located in low-cost, stand-alone buildings. Identify the high-end retailer and the discounter. Support your answer with appropriate ratios.
b. If Rocky and Sandy have equity of $40,000 and $21,000, respectively, which company is in the more profitablebusiness?

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Rocky Sandy $35,700 Net sales Cost of goods sold Gross margin Less: Operating exp. S52,300 31,400 20,900 68,900 26,800 Selling and admin. exp. Net income 22,000 18,800 S 2,100 S 4,800 All figures are reported in thousands of dollars